The government extends the price cap on compulsory car insurance (RCA) and energy

“We want to combat any risk of excessive price increases due to the imbalances previously produced on this market and give a helping hand to Romanians, as the ASF recently did and seriously reduced the RCA insurance in the case of transporters”, stated Ciolacu in the meeting of Thursday’s government.

The Financial Supervision Authority has announced that this will be the last extension of the cap on compulsory car insurance (RCA).

However, the measure to continue capping RCA attracted criticism from the industry, which said that the measure does not take into account the effects of inflation.

Insurers also say that the cap affects the right of insurance companies to assess the risks of accidents they cover and, consequently, the right to set the prices charged.

RCA rates have been capped since April 2023. The decision was taken after Euroins, the biggest player on the RCA market, had its license withdrawn and there was a risk that the other companies would raise the price of compulsory car policies.

Initially, the measure was intended for six months, but it was later extended by three months.

The Government has also announced that it will maintain the cap on energy prices until the end of March 2025. The Prime Minister says that, after this date, the market will be gradually liberalized for a year, with the total removal of the caps being carried out within about two years.

“The population and the economy remain protected and we also ensure that the return to the free market is phased until 2026 at fair prices,” said Marcel Ciolacu.

The Minister of Energy, Sebastian Burduja, said that the Government is also eliminating a legal provision that would have allowed ANRE (National Energy Regulatory Authority) to tax prosumers, the so-called “sun tax”.

“We have proposed the repeal of the possibility of imposing that tax on the sun, of the article that from 2026 would have given ANRE the possibility to impose a tax on prosumers. Today there are over 120,000 prosumers in Romania, with an installed power of over 1,500 MW”, said Minister Burduja.

The extension of the energy price caps and the RCA come after the capping of the commercial addition to basic food products until the end of 2024 was approved by the Government and Parliament.

And the move to cap commercial toppings on staple foods has been criticized by supermarkets and food manufacturers.

Specialists consulted by Free Europe say that, in general, policies by which the state intervenes in setting prices are harmful to the economy, especially if they are maintained for a long time.

They admit that in times of crisis, it is desirable for the government to intervene with price ceilings to protect citizens from too large fluctuations. But these interventions, they say, must be done for strictly limited periods, because the imposition of price ceilings distorts market mechanisms and can unbalance it.

Prime Minister Marcel Ciolacu also announced the extension by two months, until May 31, of the deadline until which companies will not be sanctioned if they do not enter invoices into the Ro e-Factura electronic system. The prime minister said that “the system still needs some updates”.

The extension of the term comes at the request of the business environment. The companies complained that the e-Invoice program has many shortcomings: the ANAF servers are unavailable for hours, the software does not correctly process the documents sent by taxpayers and the procedures are cumbersome.

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